Accounting for the basic aid district “fair share” reduction from certain categorical programs
Section 37 of Assembly Bill 2 of the Fourth Extraordinary Session (ABX4 2) requires that categorical funding allocations to basic aid school districts in fiscal year 2010–11 be reduced by the lesser of: (1) the district’s 2009–10 total revenue limit subject to the deficit factor, calculated as of the 2009–10 certified second principal apportionment, multiplied by 5.81 percent or (2) the amount of the district’s excess taxes. This reduction applies to fiscal year 2010–11 only and entitlement to funds in subsequent years will not be affected.
Basic aid districts will account for the “fair share” reduction similarly to the 2009–10 per-ADA reduction.
- Categorical revenue is reduced, not revenue limit, e.g., no negative Object 8011.
- Most of the reductions will come from flexed categorical funding (Resource 0000, Object 8590). Although the CDE will identify from which flexed “programs” the reductions are taken, districts that continue to track individual programs locally will apply the reductions based on local priorities.
- Reductions of any remaining restricted programs, e.g., Economic Impact Aid or Transportation, will be reflected in the appropriate restricted resource code.
- 2009–10 to 2010–11 categorical deferral reductions
- Districts that accrued in 2009–10 the categorical deferrals being reduced in 2010–11 will reverse the accrual, up to the amount reduced.
- Districts that did not accrue in 2009–10 the categorical deferrals being reduced in 2011 may have no entry for 2010–11, assuming the entire deferral was reduced. Otherwise, the net deferral revenue will be reported. For audit trail purposes districts may want to record separate transactions, e.g., the deferral revenue at gross and an offsetting entry showing it was paid back to the CDE.
- 2010–11 entitlement reductions
- Districts will record the net revenue received, or no revenue if the entire entitlement is reduced. For audit trail purposes, districts may want to record separate transactions, e.g., the 2010–11 entitlement revenue at gross and an offsetting entry showing it was paid back to the CDE.